Why dismissed Merger agreement of Himalayan and Investment Bank ?

Jul Wed 2020 07:31:15

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Why dismissed Merger agreement of Himalayan and Investment Bank ?

Kathmandu. Merger agreement has been broken between two big banks, Nepal Investment Bank and Himalayan Bank. The special proposal regarding the merger has been rejected by the general meeting of Himalayan Bank.

Ashok SJB Rana, chief executive officer of the bank's Himalayan Bank, said the 75 percent majority needed to pass the special resolution was not reached as the bank's large investors were in opposition.

Despite the signing of the merger agreement between Himalayan Bank and Nepal Investment Bank on April 12, the bank's big investor Employees Provident Fund and Chairman Prachanda Bahadur Shrestha have been against the merger recently. According to an operator of Himalayan Bank, Chairman Shrestha was against the merger when there was a split vote in the merger proposal.

Nepal Investment Bank and Himalayan Bank's Final preparations for Big Merger

A source said that Nepal Investment Bank and Himalayan Bank are engaged in final preparations for the merger. After the Nepal Rastra Bank started writing to the commercial banks about the merger, the big banks are also busy with the internal homework of the merger. Although the investment bank had proposed the merger a long time ago, it was a bit late when Himalayan Bank took the initiative to bring in British investors CDC.Chairman of Nepal Investment Bank Prithvi Bahadur Pandey informed that there is no alternative to merger as it has negatively affected the banking sector recently.

The CDC had sought to buy the founding shares of Habib Bank of Pakistan in Himalayan Bank. However, a Himalayan Bank source said that CDC has not shown any interest in buying the shares after the spread of Corona Virus 9 Covid 190 infection. Himalayan Bank was preparing to merge with other banks if necessary after CDC bought the shares of Habib Bank.

Nepal Rastra Bank (NRB) has asked for a merger to help reduce the number of banks. It seems that the CDC will be delayed a bit and the coronavirus 9 Kovid 190 will slow down the economy and the bank will have to make additional arrangements to protect itself, said Ashok Rana, chief executive officer of Himalayan Bank. Given He also said that Nepal Investment Bank was the first choice for the merger.

Himalayan Bank is also in a hurry to merge with another suitable bank as it sees less possibility of entering the CDC. Himalayan Bank also agrees that the investment bank is suitable for the merger.

Only a few days ago, an informal meeting was held between the directors of Nepal Investment Bank and Himalayan Bank. According to sources, the meeting agreed that Himalayan and Investment Bank were suitable for the merger.